Capstone reports Q1 revenue up 60% to $12.6 million, gross margin at 23.5%

Capstone Holding Corp. (NASDAQ: CAPS) reported first-quarter revenue of $12.6 million, representing a 60% increase from $7.9 million in the same period last year. The building products distribution company also reported gross profit of $3.0 million, up 124% from $1.3 million in the prior year quarter.

The company's gross margin expanded 670 basis points to 23.5%, compared to 16.8% in the first quarter of 2025. Capstone stated this represents its highest first-quarter gross margin in four years. The results reflect the first full quarter of contribution from recent acquisitions Carolina Stone and Canadian Stone Industries.

Adjusted EBITDA showed a loss of $0.9 million, compared to a loss of $0.6 million in the prior year period. However, the adjusted EBITDA margin improved 60 basis points to -6.9% from -7.5%.

Chief Executive Officer Matthew Lipman said the company expects to turn adjusted EBITDA positive in the second quarter. Capstone reaffirmed its fiscal 2026 guidance of $72.1 million in revenue, $18.7 million in gross profit, and approximately $3.8 million in adjusted EBITDA.

On a pro-forma basis, accounting for acquisitions as if they were owned for all of fiscal 2025, platform revenue would have been approximately $68 million compared with the reported $46.9 million.

The company noted that approximately 72% of its original convertible note principal has been converted, with $4.92 million of the original $6.82 million retired and about $1.90 million remaining outstanding as of May 1, 2026.

Capstone operates across 38 U.S. states and Canada, distributing stone veneer, hardscape materials, and modular masonry systems through its technology-enabled platform.

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